WMC Opposes Jauch Mining Tax Hike

February 6, 2013

Tonnage Tax Would Hurt Job Creation in Wisconsin

MADISON – A new iron mining tonnage tax proposed by State Senator Robert Jauch (D-Poplar) would hurt mining prospects in northern Wisconsin and hurt the state’s business climate, Wisconsin Manufacturers and Commerce (WMC) said Wednesday.

“Senator Jauch’s tonnage tax would hike taxes at the worst possible time, when a company is seeking to invest in new jobs,” said Scott Manley, Vice President of Government Relations for WMC, the state’s chamber of commerce and largest business association. “This tax hike will make it much more difficult to create and sustain family-supporting mining jobs.”

Today, two legislative committees are considering bills that would reform Wisconsin’s iron mining laws to encourage the creation of an environmentally safe iron mine near Hurley. The mine would be located in Senator Jauch’s district.

“The problem with a tonnage tax is that the mining company pays the tax as ore is extracted regardless of whether they are making a profit,” Manley said. “It would establish an uncompetitive tax policy and sets a dangerous precedent in taxation.”

“The gross tonnage tax is a poorly conceived tax policy, and is every bit as economically flawed as Governor Jim Doyle’s gross receipts tax on oil companies or Senator Chuck Chvala’s gross receipts tax on phone companies. Senator Jauch’s tax hike should be rejected,” said Manley.
The iron mining reform legislation is supported by Governor Scott Walker and has been introduced as Senate Bill 1 and Assembly Bill 1, giving it the honorary distinction of being the Legislature’s highest priority.

“The Legislature should not enact a new policy that taxes investment, and makes it more likely that a business must shutdown during economic down times,” Manley said. “Enacting a new tax on a business seeking to locate in Wisconsin and make an enormous investment in our economy does not send the signal that Wisconsin is open for business.”

Roughly 2 billion tons of iron ore are under consideration for mining in Ashland and Iron Counties. The mine could operate for more than 100 years, and employ at least 700 workers. More mining jobs would be created if a mine operated at higher capacity. More than 2,000 jobs would be created during the construction of the $1.5 billion mine, one of the largest private investments in state history.

Wisconsin Manufacturers & Commerce (WMC)

Founded in 1911, Wisconsin Manufacturers & Commerce is the state’s chamber of commerce and largest business trade association representing more than 3,700 employers of every size and from every sector of the economy.